Farmer's Voice

BRAZIL - NO AGREEMENT ON TOBACCO PRICES; COMPANIES OFFERED A 6 PERCENT INCREASE

es.jpg Spanish version of the document

Foto5.jpgDuring the second round of face-to-face meetings between growers' representatives and tobacco companies, the parties fail to reach an agreement on prices for the present crop.  The Brazilian Tobacco Growers' Association (Afubra), the Agricultural Federation (Farsul, Faesc, and Faep), and rural workers' unions ( Fetag and Fetaes) had initially demanded an 11.7 percent increase during the first round of meetings in early December, but lowered their demand to 10 percent.


On January 24th, Philip Morris increased its offer from 5.5 to 6 percent.  Universal Leaf Tobaccos, which did not present an offer during the first round of negotiations, announced in the early afternoon a proposal for a 6 percent increase.  Alliance One also increased its offer from 5.8 to 6 percent.

The president of Afubra says he feels much aggrieved by tobacco manufacturers.  This feeling arises from the average price obtained for the last crop, of R$ 7.51 ($ 3.60).  To keep this price in U.S. dollar terms, the average price for the present crop should be R$ 8.53, which means a 13.6 percent increase.  For Werner, this aspect deserves to be considered by the industrial sector.  "Tobacco companies should learn to value growers and their own workers to the same extent they value their customers, given that their bottom lines depend greatly on those two groups", he said.  Growers have not closed the negotiation process yet.  They will wait until January 31st for a new proposal by the companies.  The idea is to give companies a reasonable time to review the data and present proposals that are closer to growers' demands.  If this is not the case, growers' representatives will meet in early February to discuss their options regarding the marketing of the present crop, which is already under way.